Paul Walsh, General Manager – EMEA at building analytics company CIM, investigates the role a smart building analytics strategy can play in addressing manufacturing’s energy challenges.
Many UK manufacturing companies have announced their intention to achieve carbon neutrality, but delivering on this commitment will prove uniquely challenging for manufacturers with energy-intensive, complex factories. This is especially pressing with decarbonisation targets and the UK’s notoriously high industrial electricity £/kWh in mind, which is set to be impacted further by ongoing geopolitical events.
The everyday burden of keeping complex manufacturing sites as efficient as possible presents a significant challenge to businesses, for stakeholders at every level, from facilities managers to C-suite leadership. In the face of soaring energy costs and ongoing criticism from energy-intensive industries over a lack of governmental support, the importance of keeping UK firms as competitive as possible has never been more acute. However, the impact of recent ongoing global crises is hard to ignore, and industry sources are warning that UK electricity prices may increase over 60% higher than mainland Europe.
Highlighting this very real and growing issue for UK manufacturers, research by Make UK suggests that in the first quarter of 2022, 17% of manufacturers had to temporarily halt production of energy-intensive products due to the costs of production. Although this scenario is more likely to impact SMEs under huge margin pressure than tier 1 manufacturers, larger businesses are nevertheless feeling the squeeze as operational costs rise.
With energy prices potentially affecting output, the manufacturing sector is also experiencing the added pressures of dealing with ongoing supply chain issues, expensive logistics, increasing tax and input costs. Although demand for manufactured goods remains high, these factors are continuing to squeeze already under-pressure profits.
Yet despite these urgent issues coming to the fore, energy-intensive, complex manufacturers cannot place sustainability on the back burner. Indeed, a recent Climate Change Committee report stated that alongside construction, the sector contributed to 14% of UK emissions in 2020. Regulations around this pressing issue have therefore become increasingly stringent, with the government’s 2019 pledge of net-zero carbon emissions by 2050 tightened further as a roadmap is built to a greener future.
Governmental legislation adopted from the Climate Change Committee’s Sixth Carbon Budget advisory report, which proposed emissions reductions of 75% by 2035, is a good example of this increasingly ambitious, but no less painful, approach to decarbonising operations.
Demand side reduction
According to the Climate Change Committee (CCC), UK manufacturing and construction emissions dropped five percent in 2020 during the COVID-19 pandemic, only to rebound back up to overall 2019 levels in 2021. This rebound occurred primarily in manufacturing as well as in surface transport and electricity generation, each of which had significant reductions in 2020 due to the response to the pandemic. This highlights the increasing need for manufacturers to be proactive in their approach, to ensure their building and facilities’ energy efficiency is optimised and managed to help reduce costs and carbon emissions.
Alongside this, the optimisation of all operations will also aid in the national grid transition from fossil fuels to greener sources. In the European Union, for instance, the European Commission has requested member states reduce gas consumption by 15% this year to alleviate disruption from Russian supplies. Though the UK is less exposed to these pressures, with government figures stating that Russia only supplies four percent of the nation’s gas, the wider impact of recent events on the energy market will likely accelerate decarbonisation efforts.
Indeed, a March 2022 analysis from the University of Oxford stated that if the government adopted measures identified in the CCC’s Sixth Carbon Budget, the UK could eliminate the need for Russian gas imports by 2023. In these findings, it is clear to see a link between reducing costs and consumption, boosting overall energy resilience while switching to greener fuel sources in line with net zero targets.
Yet, as the organisation has stated in its 2022 Report to Parliament, there remain areas where the government is not clear what ambition existing plans on energy efficiency aim to deliver. However, regardless of gaps in policy, such as improvements in resource efficiency, it is imperative that energy-intensive manufacturers do not delay implementing measures, which in return can deliver cost benefits through data-driven analytics and operations.
The path to zero emissions in manufacturing is long and challenging, and regardless of when the government provides guidance, it is clear what direction tier 1 manufacturing businesses should be heading in to meet sustainability targets.
Some action is being taken. For example, 40 major UK companies have pledged carbon neutrality by 2030, with others looking to achieve the same goal by 2050. But again, in a business landscape that was already recovering from COVID-based disruption even before the upheaval caused by the war in Ukraine, the path forward is becoming increasingly challenging. Good planning and support across businesses is therefore necessary if it is to be traversed. For energy-intensive manufacturers, ensuring the move toward carbon neutrality becomes engrained in business culture is even greater still.
Insufficient C-suite support
Despite this, it is evident that facilities managers at the sharp end of these issues are not receiving the support required to reduce consumption. A major example is in HVAC systems, which can account for circa 40% of a site’s overall energy consumption. This major oversight will continue to hamper building and facility efficiency and sustainability efforts. Indeed, according to recent research commissioned by CIM and published in a new report, The Energy Blind Spots, only 35% of facilities managers at tier 1 manufacturers felt that energy efficiency was a high priority to the C-suite.
However, to really achieve net-zero commitments, and improved energy performance while remaining competitive, site leadership teams need to prioritise efficiency programmes on HVAC plant and critical equipment. Very high internal operational costs, such as those associated with a purely reactive approach to HVAC efficiency, or indeed any other critical system, are likely to result in less available investment for new, more sustainable machinery and other fixed assets.
This lack of available funding was further seen in CIM’s research, where 87% of respondents stated that CAPEX constraints were a major barrier to improving energy performance. This highlights the need to realise OPEX savings through means such as actionable, data-informed building insights.
However, with insufficient support from senior leadership, manufacturing businesses may end up in a cycle of perpetual firefighting, constantly reacting to issues arising from building management system (BMS) alarms. Moving from a reactive to a proactive footing will be key to ensuring energy-intensive manufacturers are best placed to handle soaring bills and increasingly demanding sustainability commitments.
This reality is borne out in CIM’s research, which found that less than one-third of facilities managers surveyed (29%) were continually monitoring carbon emissions. These findings were in spite of the fact that 63% of respondents’ sites had been certified to the ISO 50001 standard for energy management. Considering that 62% of respondents also believed they were deficient in their day-to-day collection of key BMS data, a picture is further painted of under-pressure and misdirected facilities teams, with enhanced support for building and data monitoring needed.
Yet despite this, research conducted in 2021 by the Enterprise Research Centre found that less than 60% of manufacturing and construction SMEs had any digital strategy in place. When considering the amount of data that a building can produce across all utilities, digitisation is a clear step that can be taken to further understand what is really happening on-site and to take proactive action as needed.
While the need for a data-driven strategy is clear to address operational efficiency and sustainability concerns, energy-intensive manufacturers need to balance this with day-to-day work pressures. The volume of data that BMS and critical equipment can produce is understandably overwhelming for already time-constrained and pressured facilities management teams.
Not addressing this is leading to the phenomenon of ‘BMS alarm fatigue,’ in which manufacturing facilities teams inundated by constant alarms may become less likely to address these alerts, as the alarms are too frequent and not prioritised. As a result, a further barrier is erected against mitigating skyrocketing energy costs and decarbonising operations. This is seen in CIM’s findings, where 27% of respondents said all BMS alarms go unactioned as they receive too many notifications.
So for manufacturers that already have a BMS, reducing alarm fatigue and better leveraging analytics data will also help to reduce energy costs. Specifically, building analytics platforms capable of ingesting BMS and equipment data to deliver prioritised, actionable insights to on-site teams can provide more informed support across entire manufacturing plants.
Innovative technology is available to address the concerns around alarm fatigue, with platforms such as the above being developed that ingest live building data. By applying machine learning and automated fault detection diagnostics, these can provide predictive and proactive insights and actions, reducing the need for facilities teams to react in person to every alarm.
The most innovative of these systems are monitored by HVAC mechatronic and electrical engineers, ensuring facilities teams’ workloads are prioritised towards actions that will achieve the strongest outcome and savings.
With these platforms and steps taken, manufacturers can go beyond the previous reactive, or ‘fix-and-forget’ approach that can leave them in a constant loop of running repairs, and unable to best action larger strategic steps to improve overall efficiency and sustainability. Instead, they can now be in a better place to address outside concerns such as advancing decarbonisation targets and rising energy costs.
It cannot be denied that this is a very difficult time for energy-intensive manufacturers. But by taking the comparatively minor step of deploying a smart building data strategy, key stakeholders can deliver and optimise demand-side reductions. In turn, this could spark the beginning of a virtuous circle, in which interdependent areas – sustainability, competitiveness and energy efficiency – inspire ongoing improvement. Consequently, an under-pressure sector and its personnel can be more effectively braced against further disruption in the future.
For more information on CIM’s new report, The Energy Blind Spots, click here.
For more stories on Sustainability click here.